Falling prices drive smartphone growth

29 November 2013

FRAMINGHAM/SINGAPORE: Smartphone growth in emerging markets such as China and India will be driven by falling prices, which will allow many value-oriented users to upgrade from their feature phones, a new forecast has suggested.

Data from IDC's Worldwide Quarterly Mobile Phone Tracker indicated that average selling prices (ASPs) were falling around the world and predicted a 7.3% drop globally and an 8.9% decline in Asia Pacific between 2013 and 2017.

This would have the effect, IDC said, of moving smartphones beyond an urban elite and into a mass market.

"The game has changed quite drastically due to the decline in smartphone ASPs," said Ryan Reith, an IDC Program Director.

"Just a few years back the industry was talking about the next billion people to connect, and it was assumed the majority of these people would do so by way of the feature phone. Given the trajectory of ASPs, smartphones are now a very realistic option to connect those billion users," he added.

In its new report, IDC forecast that smartphone shipments in the Asia Pacific region would hit 528.2m units this year and reach 986m by 2017. Over the same period the average selling price will decline from $262 per unit to $215.

The appetite for smartphones is evident in the speed at which they are being snapped up. The Next Web reported how Xiaomi, a Chinese manufacturer, sold 150,000 units of its newest device via the WeChat app in less than ten minutes.

A separate survey from ad platform Millennial Media, based on impressions on its own mobile advertising platform, found that Samsung and Apple dominated the market for mobile devices in Asia-Pacific, accounting for 63% of all platform impressions in the third quarter and 17 of the top 20 devices.

Samsung accounted for 36% of all platform impressions and Apple 27%. The top five was rounded out by Nokia, on just 4%, HTC, on 2.5%, and Blackberry, on 2.4%.

Games was the largest application category, based on the same metric of platform impressions, followed by Music & Entertainment, then Productivity & Tools and Mobile Social Media. Two new categories appearing in the top ten in third quarter were Media & Video and Communications.

A country breakdown revealed some national differences. In Indonesia, for example, Blackberry was a significant manufacturer, with a 16% share of impressions putting it in second place behind Samsung. Four Blackberry smartphones also appeared among the top 20 devices.

For Indian and Singaporean consumers, meanwhile, the Entertainment & Music category of apps received the highest number of impressions.